China National Offshore Oil Corporation (CNOOC) has announced that the Chinese flagship deepwater oil rig Haiyang Shiyou No. 981 is drilling in the Andaman Sea, south of Myanmar, 5,000 meters below sea level, the deepest of its missions so far, reports US Chinese news outlet Duowei.

State-run China National Petroleum Company (CNPC) is chartering and operating the US$1 billion rig. In 2007, the Myanmar government presented China with three offshore deepwater oil blocks, AD-1, AD-6 and AD-8, with a total area of 10,000 square kilometers.

The rig is China's first self-designed and constructed semi-submersible oil drilling platform that can drill beyond 3,000 meters below the sea surface. The rig was launched in 2010 and was first deployed to the South China Sea early in 2012. In September 2014, the CNOOC reported massive oil flow in the region.

Since the 1970s, Vietnam, the Philippines and Indonesia, have worked in cooperation with about 200 energy companies and tapped around 1,400 wells in the South China Sea, provoking the wrath of Beijing.

In Mid-2014, conflicts arose between China and Vietnam when the rig was deployed to waters which Vietnam claims as its exclusive economic zone, leading to a prolonged stand-off between ships belonging to the two countries and widespread protests and rioting in Vietnam.